It’s costing XM more this year to add each subscriber.
In the second quarter, XM’s subscriber acquisition costs, a component of “cost per gross addition,” was $75 compared to $67 in the second quarter a year ago.
The company cited OEM growth from increased production by the company’s newer automotive partners, and the effect of manufacturers eliminating some products from their inventory lines, which we reported on earlier.
Its cost per gross addition was $121 compared to $112 in the second quarter of 2006.
Sales in XM’s OEM channel were higher, and retail churn increased.
Jonathan Jacoby, Banc of America analyst, noted in a client memo that retail churn ticked to 2.08 percent, exceeding 2% for five consecutive quarters.
President/Interim CEO Nate Davis said that as expected OEM sales are increasing, but aftermarket radio sales are soft, which he and other executives attributed to competition from other audio entertainment devices.